The research house in its note yesterday said it cut earnings by 29 per cent, three per cent and seven per cent, respectively, for the financial years 2014, 2015 and 2016.

"However, we still believe that there is deep value in DRB-HICOM with abundant synergies to be realised within the group.

"A case in point is the acquisition of Konsortium Logistik Bhd, which will be an important link in its logistics puzzle," it said, adding that it was recommending a "buy" call for DRB-HICOM with a target price of RM3.50.

Meanwhile, Kenanga Research, which maintained its "market perform" rating for DRB-HICOM, said it was downgrading the conglomerate's net profit for financial years 2014 and 2015 by 15 and 12 per cent, respectively, taking into account the higher-than-expected losses in Lotus.

The research house also reduced its target price for DRB-HICOM from RM2.62 to RM2.53. Bernama